Sega has reduced its full year sales and profit forecasts for the current financial year amid struggles in the pachinko industry.

Full-year net sales of $3.38bn and profits of $98.1m were originally predicted by the Japanese veteran, but it has now revised these totals to $2.94bn and $44.6m respectively.

The culprit isn't the video games business as you might have expected, but the pachinko industry. Sales are now expected to be some 30 percent below initial forecasts.

Sega’s entertainment business - which includes video games - has actually done rather well, although Sega has still lowered its game sale forecasts by $44.5m to $1.9bn. However, operating income is expected to rise by 30 percent.

It's been something of an odd year for Sega, with Sonic Mania - which, was arguably intended to be an appetiser between mainline Sonic games - becoming a critical and commercial hit, while Sonic Forces has suffered something of a mauling at the hands of reviewers. Sega's other big success this year has been Total War: Warhammer 2.

Here's the official statement issued by Sega:

As to the entertainment contents business, strong performance is evidenced by operating income as of the end of the first half surpassing the previous full year forecast and such.

Although launch of new titles for digital games field might delay compare to initial plan, several new titles include mainstay titles are scheduled to be released in packaged games and amusement machine sales field of the entertainment contents business in the second half, operating income is expected to surpass the previous forecast.

What have you made of Sega's efforts this year? Let us know with a comment.

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Geez... Pachinko machines must be a really notable investment for Japanese game developers, aren't they? Either way, aside from the fact that Sonic Mania and Total War: Warhammer 2 are performing well for Sega, what other game has Sega released this year, and how did they do? Also, about Sonic Forces, if reviews and most of the reception isn't doing favors for the game, how did it do in sales? And could someone tell me something about the "struggles in the pachinko industry"? Regardless, it sounds like a mixed bag for the company when taking everything into consideration. Hopefully, this is just a minor nuisance for them and not a full-blown dilemma.

Sega (specifically Sonic Team) should stop making Sonic games and instead make reboots of their old IPs. Let's have a new Jet Set Radio, Super Monkey Ball, Crazy Taxi, etc. Its been proven that Sonic Team doesn't make good Sonic games anymore.

Basically, Sega Sammy Holdings is the parent company for Sega. It's also the parent company for Sammy Corporation. Sega is the entertainment division and Sammy Corporation is the pachinko division. Both divisions are unafilliated with each-other, their only link is their parent company.

@MrGamerClock64 So, how did NiGHTS: Journey of Dreams, Jet Set Radio Future, and Billy Hatcher do in terms of sales, to begin with?

@GC-161 Honestly, I think it all boils down to management and focus when it comes to making the game. Aside from some story kerfuffles, which I don't know what happened there, I've heard that the people in charge of level design were just three people, one of which only had an experience in Sonic Lost World, while the other two are completely new to this, hence some of the gameplay problems, especially with most stages being too quick or some stages being too linear.

@AlphaJaguar Okay, then. So, what kind of struggle does the pachinko industry have now, anyway? And I assume that all three divisions have equal amounts of focus or not?

An odd year only in the obtuse mind of Sega, everybody else obviously already knew that Sonic Mania was going to be far better than Sonic Forces.
Sega wanted to make it just an appetiser, I hope they learned the lesson and next time they will properly value the right game

That's actually shocking that dead-Sega with the bad Sonic games is now the success of the company while the cash cow pachinko if flailing.

@Senpai_Bruh When are gambling machines NOT a good investment? Not many folks ever got poor running a casino...

Thing in Japan is gambling is illegal so this whole thing is "This isn't legit for gambling, honest! Scouts honor! Prize redemption of $100,000 yen per plastic token is three doors down across the street, talk to the guy in the pink tie."

But where I think the predictions are falling short is gambling legalization was on the table in Japan for the past few years, so I think the gambling machine companies were estimating high sales upon legalization....but that legislation stalled out and a greater focus has been put on "defense" in light of North Korea's activity....so with legalized gambling tabled, pachinko isn't exploding like the companies were planning/hoping/putting their carts before horses.

I think sega should go back to their roots the classic arcade games is what sega is all about. Give us a new

Golden axeStreets of rageAlex kidd Sonic mania 2

Making newer versions of the best classic megadrive games makes so much sense it will be cheaper costs to make for me personally i love the older games as they are more fun and simple to play. Sonic mania nes and snes mini consoles has proved classic gaming isnt dead and its what gamers want.

@BlueOcean I've not seen Sonic Forces troubling any sales charts and it bombed in Japan selling barely 10,000 copies in its first week across all platforms whilst Mario did over 70,000 in its 3rd week. Sega have destroyed Sonic so much over the years that he can't even begin to compete anymore, at this point they need to get rid of all these characters nobody cares about and start again

@ShockFire10 Yeah, they all have equal focus from a corporate standpoint.

In regards to the loss in Pachinko, changes in the Japanese laws of gambling are affecting the Pachinko industry alongside a general trend in people being less interested in Pachinko. Sammy Corporation originally had a strong market share with Pachinko, but times are just changing.

Their resort business was a recent endeavour but it's arguable thier biggest loss out of all three of their business. Funny how their gaming division used to be a mess in the late 2000's, but now, it's the division that's printing money.

@JJ286 No, just no. Sega and Atlus have a bunch of games contractually exclusive to Sony and they have subsidiaries exclusive for PC gaming. Plus, that'll just make Nintendo more monopolous than they need to be.

@carlos82 Even though Mario usually stars in the better games, I think that the Sonic character is better and I also love Tails and Knuckles. Sonic deserves much better than what the current members of Sonic Team can achieve, they need to hire Sonic's creators.

@BlueOcean if definitely keep those 2 as well but anybody after that can just go away 😃 oh and stop Tails from talking because he's just annoying now. I used to love Sonic games and Mania is probably my second favourite game on Switch at the moment behind Odyssey. I would dearly love for them to finally get a 3D Sonic game right or at least let the Mania team make some more old school Sonic games

@carlos82 Oh yeah, the script in modern Sonic games is just awful and the franchise doesn't need all those silly characters. I like Sonic Mania a lot, but I think that Sonic 3 & Knuckles is much better, that's why I'd like Sega to hire old good Sonic creators.

I wonder what Sega thinks about Sonic Forces now, they promised that it would be a high-quality Sonic game but it has met lukewarm reviews and you say that sales aren't great either. Something is not working at Sonic Team, Sega!

@carlos82 People still care about Sonic, the success of Sonic Mania proves that. What people are getting sick of are bad to mediocre games in the franchise.

I used to be a huge Sonic fan, but the string of bad to mediocre titles soured me on the franchise, and I only came back for Sonic Mania.

Sonic Mania is awesome, and proof that in the right hands a good Sonic game can still be made. Sega should have used Mania as a way to reboot the franchise, with Sonic Mania 2 coming in a few years, then Sonic Adventure 3, and then try to make a deal with Nintendo to make a Sonic/Mario teamup game that everyone wants to see.

But rather then feed off the goodwill of Mania, Sega limped Sonic Forces out and lost all of that positive feedback quickly. Now, Mania is seen as a great game, but a fluke with no change for the Sonic franchise.

Personally, I have no interest in Sonic Forces. Everything about it reminds me of the crappy Sonic games that soured me on the franchise in the first place.

Sonic can still be good in the right hands. Sonic Mana proved that. But Sonic Team could not make a good Sonic game now if their lives depended on it. Sega needs to take the franchise away from them and find someone else to do the job.

I search through all comment so far and only one, ONE person mentioned Yakuza/Ryu Ga Gotoku series. You Nintendo gamers probably not familiar with it, which is understandable, but that series is actually huge in Japan. In the west they're some kind of niche and only gaining popularity recently but in Japan they're like Call Of Duty or Assassin's Creed here with yearly release and big hype surrounding the releases. It's SEGA's cash cow right now, and they'll keep pushing it because the series is a brainchild of the company current leader Toshihiro Nagoshi.

So while they don't do much with their old IPs, they do have some (relatively) new hotness like Yakuza/RGG, Project Diva, or Total War series.

@raisenvThe first Yakuza was released in 2005.Shogun: Total War was released in 2000.

Hardly new hotness. 10 years is like a lifetime in this industry

What is nice to see is that Sega does remain somewhat commited to being a quality PC publisher, and for a Japanese company they've been doing pretty well, even publishing Relic and Creative Assembly's PC-exclusive games, and delivering high-quality ports of Bayonetta and Vanquish for example.

@Pigeon Sonic Adventure was well received on the Dreamcast, and actually is a decent game (in my opinion, yours differs)
Sonic Adventure 2 was made by Sonic Team USA if that’s what you mean? Some of the Japanese staff moved to the USA from Sonic Team Japan.

@Pigeon I beg to differ on Sonic Adventure 2, it was absolutely Sonic Team USA not the Sega Technical Institute whom developed it, in fact, Sonic Spinball was the only STI delveloped 90’s Sonic game. STI was headed by Mark Cerny and I’m pretty sure their last game under that name was Comix Zone in 1995 unless some obscure Pico game was developed by them.

Either way, it’s horses for courses, there were essentially 2 Sonic Teams, run separately no doubt like everything in Sega back then.